S Korea opposition to seek summit with China if frontrunner elected

SEOUL – South Korea’s major opposition party will seek a summit with China to resolve an ongoing diplomatic spat over a US anti-missile radar system if its presidential candidate is elected, the party’s chief policymaker said in an interview with Reuters.

Yun Ho-jung, the chairperson of the Democratic Party’s policy committee and a long-time acquaintance of presidential front-runner Moon Jae-in, said the economy faces risks from possible protectionist policies from China and the United States.

Moon currently holds the lead in a majority of polls, but he is closely being followed by a candidate from another opposition party, Ahn Cheol-soo.

Beijing’s anger over a joint plan by the South Korea and the United States to set up the Terminal High Altitude Area Defence (THAAD) missile system has led to the closure of South Korean businesses in China and a sudden drop in Chinese tourists to South Korea.

While Yun said placed the blame for current problems with China on the ruling party, he said his party and Moon are prepared to complain to China if unfair action is taken to curb South Korea business there.

“This will not be easily solved through working level talks, so after we enter the Blue House we will push for a summit with China,” Yun told Reuters in an interview late Wednesday.

Yun said Moon would not unilaterally begin cooperation with North Korea to restart stalled talks or joint projects and that all inter-Korean efforts should benefit both Koreas.

“North Korea should not be the only one to reap profits,” he said.

Additionally, the lawmaker added efforts will continue to discuss with the United States how South Korea has been boosting corporate investment there and that South Korea is running a services deficit with the world’s largest economy.

STRUCTURAL CHALLENGES

The Democratic Party would also raise taxes, aggressively increase government spending aggressively and push for a supplementary budget to boost an economy hit by an ageing, declining population if Moon wins office, Yun said.

“We have had to draft extra budgets year after year because there were problems at the annual budget planning stage,” said Yun. “Part of the blame is on the ruling party because they kept the budget growth rate so low.”

Moon said on Wednesday he will push for a supplementary budget as soon as he takes office if he is elected president and vowed to create half a million jobs per year on average through investment and government spending.

Yun explained the bulk of the new jobs would initially be made in the public sector. He added this year’s supplementary budget and expansionary government spending for five to seven years would avoid relying on issuing new treasury bonds but rather on surplus tax revenue.

The party will also seek to raise the ratio of South Koreans’ tax burden to gross domestic product by 1 to 2 percentage points, Yun said, as South Korea’s ratio stands far lower than the 26.1 percent average for countries of the Organisation for Economic Co-operation and Development (OECD). The ratio stood at 18.9 percent in South Korea last year.

The Bank of Korea will be left to act independently, Yun said, but he pointed out the central bank should take on a more active role in shaping the economy. The new government, if Moon is elected, would leave exchange rates to the market, Yun added.

South Korea will elect a new president on May 9 after former leader Park Geun-hye was impeached and arrested over an influence-peddling scandal that prompted hundreds of thousands of protesters into the streets for her ouster. -Reuters